Cecilia Kang
President Trump Appoints One of His Lawyers to Review Mergers
President Donald Trump named Makan Delrahim, a former government antitrust enforcer and corporate lobbyist, to lead the Justice Department’s review of mergers and acquisitions.
The appointment is being closely watched because companies across industries have been hoping that the new Republican administration will be more permissive with mergers. Delrahim, who serves as legal counsel to the president, will be quickly tested in his new position by AT&T’s $85 billion bid for Time Warner. The review of AT&T’s acquisition of Time Warner has drawn speculation because of promises President Trump made on the campaign trail to block the deal. Trump’s disdain for news coverage by CNN, which is owned by Time Warner, has raised questions over whether the president may try to influence the deal. Jeff Sessions, Trump’s attorney general, has promised to block any political influence on Justice Department decisions. Delrahim, whose nomination will go before the Senate for confirmation, is expected to take a more free-market approach to his job of antitrust enforcement, according to analysts. His style is expected to be in line with mainstream Republicans.
Congress Moves to Strike Internet Privacy Rules From Obama Era
Republican lawmakers moved to dismantle landmark internet privacy protections for individuals, the first decisive strike against telecommunications and technology regulations created during the Obama administration and a harbinger for more deregulation to come.
In a 50-to-48 vote largely along party lines, the Senate Republican majority voted to overturn the privacy rules, which had been created in October by the Federal Communications Commission. The move means a company like Verizon or Comcast can continue tracking and sharing people’s browsing and app activity without asking their permission. An individual’s data collected by these companies also does not need to be secured with “reasonable measures” against hackers. The privacy rules, which had sought to address these issues, were scheduled to go into effect at the end of 2017. The vote begins a repeal of those regulations. Next week, the House is expected to mirror the Senate’s action through the same Congressional Review Act procedure that allows Congress to overturn new agency rules. The House is expected to pass the resolution, which would then move to President Donald Trump to sign.
Tech Policy, Too, Is Undergoing a Sea Change
Tech policy has undergone a huge change under President Donald Trump, but it doesn’t seem that a lot of the changes are getting much attention, considering everything else the administration is doing.
In a normal news cycle, the rollback of Obama-era tech policies would get a lot more attention. But make no mistake, the changes coming in privacy, network neutrality and potentially many more tech regulations will be profound. Trump’s chief strategist, Steve Bannon, promised the “deconstruction of the administrative state,” and right away we’ve begun to see that happen. Under the new president we have a new chairman of the Federal Communications Commission, possibly a different standard for antitrust review on big mergers, and maybe lots of money for infrastructure that might seep into the tech economy. Here’s the biggest tech policy changes we’re expecting under President Trump.
How Tech Policies May Evolve Under Republicans and Trump
A Q&A with Senate Commerce Committee Chairman John Thune (R-SD).
With Republicans now in power across the government, Congress has moved aggressively toward undoing Obama-era tech policies. Network neutrality, the rule that ensures equal access to all websites, and broadband privacy rules are the first targets. Lawmakers also hope to play a bigger role than in the last administration on policies of particular concern to Silicon Valley and internet users, including driverless cars and the scaling back of Federal Communications Commission powers concerning broadband providers. Asked, "How do you want to change net neutrality rules?" Chairman Thune responded, "We’re open for business. We think a legislative solution is the best alternative and that the FCC under Chairman Tom Wheeler went too far with regulations that were overreaching and basically classified the internet as a public utility under a 1934 statute. Congress needs to be heard from, or you will have a constant back-and-forth on this issue depending on which party is in the White House."
Trump’s FCC Quickly Targets Net Neutrality Rules
In his first days as President Trump’s pick to lead the Federal Communications Commission, Ajit Pai has aggressively moved to roll back consumer protection regulations created during the Obama presidency.
Chairman Pai took a first swipe at network neutrality rules designed to ensure equal access to content on the internet. He stopped nine companies from providing discounted high-speed internet service to low-income individuals. He withdrew an effort to keep prison phone rates down. In total, the chairman of the FCC released about a dozen actions in the last week, many buried in the agency website and not publicly announced, stunning consumer advocacy groups and telecom analysts. They said Pai’s message is clear: The FCC, an independent agency, will mirror the Trump administration’s rapid unwinding of government regulations that businesses fought against during the Obama years.
“With these strong-arm tactics, Chairman Pai is showing his true stripes,” said Matt Wood, policy director at the consumer group Free Press. “The public wants an FCC that helps people. Instead, it got one that does favors for the powerful corporations that its chairman used to work for.”
Rep Anna Eshoo (D-CA) said, “Ajit Pai is intelligent and genial, but he is not on the side of consumers and the public interest.”
In Washington Pizzeria Attack, Fake News Brought Real Guns
Edgar M. Welch, a 28-year-old father of two from Salisbury (NC) recently read online that Comet Ping Pong, a pizza restaurant in northwest Washington, was harboring young children as sex slaves as part of a child-abuse ring led by Hillary Clinton. The articles making those allegations were widespread across the web, appearing on sites including Facebook and Twitter. Apparently concerned, Welch drove about six hours from his home to Comet Ping Pong to see the situation for himself, according to court documents. Not long after arriving at the pizzeria, the police said, he fired from an assault-like AR-15 rifle. The police arrested him. They found a rifle and a handgun in the restaurant. No one was hurt.
Unbeknown to Welch, what he had been reading online were fake news articles about Comet Ping Pong, which have swollen in number over time. The false articles against the pizzeria began appearing on social networks and websites in late October, not long before the presidential election, with the restaurant identified as being the headquarters for a child-trafficking ring. The articles were soon exposed as false by publications including The New York Times, The Washington Post and the fact-checking website Snopes. But the debunking did not squash the conspiracy theories about Comet Ping Pong — instead, it led to the opposite.
Future of Big Mergers Under Trump? Like Much Else, It’s Unclear
Deal makers took notice in Oct when Donald Trump declared that he would seek to block AT&T’s $85.4 billion bid for Time Warner on the grounds that it would radically concentrate power in too few companies. But after an initial period of turmoil, deal advisers say that it is unclear whether a Trump administration — led by an avowedly pro-business real estate mogul — would really make life difficult for mega-mergers.
At the moment, AT&T’s planned takeover of Time Warner, the biggest merger of the year and one that is poised to reshape the world of media and telecommunications, appears to be the most likely candidate for hazing. The president-elect was among the first politicians to criticize the deal, vowing to block it if he became president. President-elect Trump said it was “an example of the power structure I’m fighting.” He also opposed a similar union between Comcast and NBCUniversal in 2013, which he called “poison.” But antitrust specialists and Republican strategists say a Trump administration may not fulfill his campaign promises.
Trump Expected to Seek Deep Cuts in Business Regulations
Hours after Donald J. Trump won the race for the White House, scores of regulations that have reshaped corporate America in the last eight years suddenly seemed vulnerable. While many questions remain about how President-elect Trump will govern, a consensus emerged in many circles in Washington and on Wall Street about at least one aspect of his impending presidency: President-elect Trump is likely to seek vast cuts in regulations across the banking, health care and energy industries.
The idea of a Trump presidency triggered a sense of dread among many people in the liberal-leaning technology business. Trump is seen as less favorably disposed toward the concentration of power among the handful of large companies that dominate the internet, including Facebook, Google and Amazon, said Glenn Kelman, chief executive of Redfin, an online real estate firm. Trump has called for the rejection of AT&T’s bid for Time Warner. Still, analysts expect that he will appoint antitrust regulators at the Federal Trade Commission and Justice Department who will largely follow traditional Republican approaches to the free market. Trump will be under pressure by major telecom and cable firms to roll back aspects of net neutrality. The rule inhibits how broadband providers manage traffic on their networks to ensure any website is equally accessible to consumers. Telecom and cable firms continue to challenge the rules in court and Mr. Trump, with the encouragement of Republicans in Congress, may seek to abandon the regulation.
One Last Growl for FCC’s Sharp-Toothed Watchdog, Tom Wheeler
As Tom Wheeler enters his last few months as head of the Federal Communications Commission during the Obama Administration — the next President is expected to name a new chairman — he has turned early supporters into foes and invited an expensive lobbying battle that may stymie a last-ditch pursuit of regulations that starts on Oct 27, including voting on a proposal for broadband privacy protections.
Wheeler’s last act as chairman could be overseeing the review of AT&T’s $85 billion bid for Time Warner, a mega-media deal that has already elicited protests from some politicians and consumer advocacy groups. AT&T and Time Warner will most likely try to avoid an FCC review by selling off the small number of broadcast television assets owned by Time Warner. Yet some say that even if Chairman Wheeler does not directly review the deal, his regulations have created new restrictions for AT&T and other broadband companies at a time when they are trying to find new growth beyond their internet businesses.
AT&T Set to Lobby for Merger With Deep Pockets and a Big Network
AT&T, in addition to its billions of dollars of capital, has another arsenal at its disposal: one of the most formidable lobbying operations in Washington. The company’s list of nearly 100 registered lobbyists already on retainer in 2016 includes former members of Congress. AT&T is the biggest donor to federal lawmakers and their causes among cable and cellular telecommunications firms, with its employees and political action committee sending money to 374 of the House’s 435 members and 85 of the Senate’s 100 members this election cycle. That adds up to more than $11.3 million in donations since 2015, four times as much as Verizon Communications, according to a tally by the Center for Responsive Politics, a nonprofit research group. AT&T has also spent decades building a national alliance of local government officials and nonprofit groups — particularly from black and Hispanic communities — that it will certainly be asking to weigh in again in Washington, as it tries to get the merger approved.
“We have seen our fair share of deals,” said AT&T’s general counsel, David R. McAtee II. “Our job is informing consumers what a good development this is for them.” But navigating this transaction will be a test of just how much influence AT&T has in Washington these days. That is particularly the case as AT&T’s lobbying team undergoes a transition after losing its longtime leader, James W. Cicconi, a former aide to President George H. W. Bush.